KARACHI: Pakistan’s economic confidence fell sharply in the final quarter of 2018 as it continues to struggle with macroeconomic imbalances, according to the Global Economic Conditions Survey (GECS).
The latest edition of GECS from the Association of Chartered Certified Accountants (ACCA) and Institute of Management Accountants (IMA) through a global poll of 3,800 accountants found Pakistan’s economy to be amongst the lowest in the South Asian region.
Other regions recorded a negative confidence score with signs of growth weakening in the world’s three biggest economies - the US, China and the Eurozone.
Global economic confidence fell for the third consecutive quarter in Q42018, ending the year at an all-time low.
Commenting on the findings, Head of ACCA Pakistan Sajjeed Aslam, said, “Despite the overall confidence in South Asia holding up better than elsewhere in the world, economic sentiment in Pakistan is now at its second-lowest level since the GECS series began in 2009.”
Pakistan’s slump in confidence reflects a poor outlook for the economy, which is experiencing a balance-of-payments crisis — the current account deficit is around 6 per cent of GDP — and a large fiscal deficit in excess of 6pc of GDP.
The World Bank recently downgraded our GDP growth forecast for fiscal year 2018-19 to 3.7pc from 4.8pc previously.
Globally, the survey reveals respondents to be pessimistic about the outlook ahead, with the lowest scores recorded in the Western Europe and the Caribbean.
The least pessimistic part of the global economy was again South Asia, followed by Africa and North America.
Narayanan Vaidyanathan, head of business insights at ACCA said that economic confidence over 2018 has been turbulent, with end of calendar year results downbeat compared to the start of 2018.
It has been interesting to look back at the GECS from the start of 2018, when we recorded economic confidence at its highest since the first survey was issued assessing Q12009.
Last year was clearly a roller-coaster ride and the outlook for 2019 is also uncertain.
Vice President of Research and Policy IMA, Raef Lawson commenting on the US perspective, added, “The US economic confidence is now at an all-time low with signs that domestic demand is starting to slow, owing to a combination of higher interest rates and the waning impact of the recent fiscal stimulus.”
But the job market remains extremely buoyant which will underpin the robust consumer spending in coming months.
Published in Dawn, January 18th, 2019